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Latvia: benefiting from the euro, facing new challenges

Author(s): Gatis Eglitis, Radoslav Krastev and Christian Weise

Latvia: benefiting from the euro, facing new challengespdf(441 kB) Choose translations of the previous link 

Latvia appears to be already reaping a number of benefits from its changeover to the euro in January 2014. Enhanced competition, bank intermediation and the low-interest rate environment are bringing immediate and long-term benefits to the economy. Moreover, despite concerns that traders might take advantage of the introduction of the new currency to raise prices, consumer price inflation has turned out lower than expected. However, the successful changeover to the euro should not give ground for complacency as policy makers are still facing challenges, such as how to cope with accelerated labour-cost growth at a time when the external environment is worsening.

(Country Focus 12. November 2014. Brussels. PDF. 8pp. Tab. Graph. Bibliogr. Free.)

KC-XA-14-012-EN-N (online)
ISBN 978978-92-79-40576-1 (online)
doi: 10.10.2765/91236 (online)

JEL classification: E3, E4, E5, G2

The views expressed in the ECFIN Country Focus are those of the authors only and do not necessarily correspond to those of the Directorate-General for Economic and financial Affairs or the European Commission.